By Alan Avery, Christopher KandelMarkus Krüger and Axel Schiemann

On 23 November 2016, the European Central Bank (ECB) published its draft guidance to banks on leveraged lending, launching a public consultation period that runs until 27 January 2017. The draft guidance is very similar to leveraged lending guidance issued by the US federal banking agencies in 2013, which has had a significant impact on the leveraged lending market in the US. There are some significant differences between that ECB’s guidance and the US guidance that could raise issues of competitive equality between US, European and other banks. Below we highlight some of the important differences between the US guidance and the ECB’s draft guidance.